Eugene Gerden


Eugene Gerden writes about the Russian auto industry from his base in St. Petersburg.

Analysts See More Rough Road for Russian Car Sales 
Analysts forecast no more than 1.2 million new-car sales this year, down 25% from 2015, the third straight year the market declined. Some predict the market will not fully recover before 2019 or 2020.
Luxury German Brands May Cut Back Russian Presence
The possible trimming of the automakers’ product lineups would exclude SUVs, consistently good sellers relative to the overall market in recession-battered Russia.
Foreign Automakers’ Share of Russian Output Drops
Local brands are benefiting from higher percentages of localization, price increases lower than those of foreign brands and state programs aimed at supporting demand, particularly those in the low-cost segment of the Russian car market.
Foreign Auto Suppliers Lose Russian Duty Discount
The ongoing economic crisis in Russia may prompt the government to cancel tariff-discount agreements with other foreign parts producers and even global automakers failing to comply with local-content requirements.
Vehicle Importers Ask Russia to Drop 65% Fee Boost 
The government says the proposed increase in utilization fees, enacted when import duties were cut as Russia joined the World Trade Organization, reflects continued devaluation of the ruble.
Limos Lead New Single-Platform Russian Luxury Lineup
NAMI director Maxim Nagaitsev says the limousine to be built for President Vladimir Putin will be the world’s largest passenger vehicle.
Ford Cuts Russian Output as Sales Retreat Continues
Annual production capacity at Vsevolozhsk is 160,000 units, but Ford built just 30,000 cars there in 2014, laying off 700 employees as a consequence. Output for full-year 2015 is estimated at only 15,000 units.
Russian Auto Industry Subsidies Upped for 2016 
A spokesman for Russia’s Industry and Trade Minister says most of the new subsidies will compensate local automakers for interest rates on bank loans and for losses resulting from currency fluctuations.
Hyundai Plans to Inject $100 Million Into Russian Operations
Despite the difficult market conditions, Hyundai Russia’s plant has been operating five days a week on three shifts, without any production interruption or staff cuts.
Ford Russia Wins Tax Break With Sales on Upswing 
A spokesman says Industry and Trade Minister Denis Manturov endorses the tax break, as the automaker has suffered from the devaluation of the Russian ruble and an increase in the key rate of the Russian Central Bank.
Russian Auto Jobs Drying Up Alongside Production 
According to automotive analysts ASM-Holding, employment in the Russian auto industry has declined 10.5% since May 2014, from 205,134 to 183,534 workers, and a new wave of layoffs may take place by the end of the year.
Struggling Audi Russia Reshuffles Top Management
Audi Russia’s sales for the first eight months of 2015 totaled 16,359 cars, down 29.4% year-on-year, WardsAuto data shows. Deliveries by rival luxury automakers BMW and Mercedes-Benz fell 21.1% and 8.6%, respectively, in the period.
GM Begins Paying Price of Withdrawal From Russia 
GM estimates the overall cost of closing its Russian business at $600 million, with a significant portion earmarked for reimbursing former dealers for their investments. But some dealers have filed lawsuits claiming the compensation is inadequate.
No Free Site for Daimler Plant, St. Petersburg Says 
“We have great respect for Daimler and we hope that it will build its plant in the territory of St. Petersburg,” city official Maxim Meyskin says. “However, the project should not be implemented at any price, which is our fundamental position.”
VW Looks to Exports to Shore Up Russian Operation 
Volkswagen has commissioned Nemak, one of its global parts suppliers, to manufacture cylinder blocks and cylinder-head components at its Ulyanovsk plant for export mainly to European Union markets.


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